Barack Obama backs Gordon Brown’s handling of global recession

US president fails to endorse David Cameron’s deficit reduction strategy but praises his predecessor at No 10

Barack Obama has dashed David Cameron’s hopes that he might endorse his deficit reduction strategy, instead praising the way the UK’s chairmanship of the G20 under Gordon Brown had dragged the world out of recession.

He also stressed the differences between the American and the British economies, even if the two countries were trying to reach the same destination.

It is understood that the White House had been angered by previous Tory claims that Obama had effectively adopted Conservative policy on deficit reduction.

At a joint press conference in the sunlit garden of Lancaster House, Obama said:

“We have succeeded in the first part to yank the world economy out of recession and that was in large part due to concerted action between the US, the UK and other countries.”

There was relief for an anxious Labour party when the president repeated his mantra from the 2009 G20 summit in London hosted by Brown: that the circumstances of each country are different.

“Obviously the nature and role of the public sector in the United Kingdom is different than it has been in the United States. The pressures that each country are under from world capital markets are different, the nature of the debt and deficits are different and, as a consequence, the sequencing or pace may end up being different.”

He also called for flexibility, saying “this is going to be a constant process of trying some things, making some adjustments”.

But he offered helpful words for Cameron when he said governments had to “live within their means”.

Cameron responded by accepting each country is different, arguing that because Britain does not does not have a reserve currency status, unlike the US dollar, it was necessary for the UK to “set out on the path of deficit reduction without delay after the election”.

He also insisted: “When I look across now at what the US and UK are contemplating for the future it’s actually a relatively similar programme in terms of trying to get on top of our deficits and making sure that debt is falling as a proportion of GDP.”

The two men also showed nuanced differences over Libya and Palestine, but agreed on Afghanistan that the priority remained a political settlement between the Taliban and the Karzai regime. The Obama emphasis on political agreement will be welcome to the British, who have long been saying that military solutions are not possible. Both men claimed there were causes for optimism in Afghanistan, but made no new announcements on a timetable for the withdrawal of troops.

But Cameron gave a striking endorsement of Pakistan’s role in finding a settlement saying: “Pakistan has suffered more from terrorism than any other country in the world. Their enemy is our enemy. So, far from walking away, we’ve got to work even more closely with them.”